Microsoft to acquire Activision Blizzard for $68.7 billion

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Microsoft has acquired Activision, the company behind Call of Duty, World of Warcraft, and Diablo. Activision Blizzard develops and publishes video game consoles, PCs, and mobile games, as well as eSports leagues. Activision, Blizzard, and King are the company’s three most important business segments. In 2016, Microsoft paid $26 billion to acquire LinkedIn for $68.7 billion, exceeding Activision’s purchase price of $68.7 billion. With this deal, Microsoft will become the third-largest gaming company in the world after Sony and Tencent, according to the company.

When the deal closes, Microsoft will add many Activision games to Xbox Game Pass. The purchase of Activision by Microsoft will allow Microsoft to publish franchises such as Warcraft, Diablo, Overwatch, Call of Duty, and Candy Crush. Phil Spencer, Microsoft’s gaming boss, says “As soon as we close the deal, we will offer all Activision Blizzard titles within Xbox Game Pass and PC Game Pass – both the new releases and titles from Activision Blizzard’s incredible catalog.” With 25 million subscribers, Microsoft’s Xbox Game Pass service now has the most subscribers. This is an increase from Microsoft’s previous January report of 18 million users. Despite Microsoft’s efforts to expand service, Xbox Game Pass, which offers downloadable games all you can eat – or “Netflix for video games” as it’s often referred to – continues to attract new subscribers.

In order to usher in a revolutionary era of gaming, Microsoft is investing deeply in its content, its community, and its cloud platform. The goal is to put players and creators first and make gaming safe, inclusive, and accessible to all, says Microsoft CEO Satya Nadella. Activision Blizzard has been accused of sexual harassment for months prior to Microsoft’s agreement. Several employees have come forward with allegations of sexual harassment since July when the California Department of Fair Employment and Housing sued Activision Blizzard. A September settlement with the US Equal Employment Opportunity Commission resulted in a $18 million settlement with Activision Blizzard for promoting a culture of harassing employees. Activision Blizzard employees have reportedly “left” the company since July, as a result of that settlement, which is currently being appealed.

Neither Microsoft nor Activision Blizzard specify how they will resolve these issues, and Bobby Kotick will remain as CEO of Activision Blizzard in the meantime. Kotick is not expected to remain at Microsoft after the transition period and the deal is fully closed. As CEO of Microsoft Gaming, Spencer will report directly to the board of directors of Activision Blizzard. Spencer was previously head of gaming at Microsoft.

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According to Spencer, “as a company, we are firmly committed to our quest to build a more inclusive gaming environment, among both players and employees.” Studio cultures are of utmost importance to Microsoft. In addition, we believe that creative success and autonomy are intertwined with dignity and respect for every individual. Our commitment extends to our teams and leaders as well. The Activision Blizzard teams look forward to being part of our proactive inclusion culture.”

Nearly a year ago, Bethesda (ZeniMax Media) was acquired by Microsoft for $7.5 billion. Now, the company is buying Activision Blizzard for $6.5 billion. The acquisition raised the number of the company’s first-party Xbox studios to 23 at the time and was seen as a boon for Game Pass. We might not see this Activision Blizzard deal approved for at least 18 months since Microsoft expects it to close by the end of fiscal 2023. The deal could take quite a while to close, but Activision Blizzard operates in different markets, so the approval process might be more involved for Microsoft.

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